House Flippers Now Required to Disclose Repairs Under New California Law
The landscape of California’s real estate market is on the brink of a significant transformation. With the enactment of Assembly Bill No. 968 (AB-968) on July 1, 2024, homebuyers are set to benefit from increased transparency and protection against undisclosed property conditions. This groundbreaking law mandates that house flippers disclose all repairs and renovations performed within 18 months of acquiring a property. Here’s how AB-968 aims to protect consumers and its broader impact on the real estate market.
AB-968 is designed with the primary goal of safeguarding homebuyers. Under this new legislation, sellers of single-family residential properties must disclose comprehensive details of any room additions, structural modifications, or other alterations and repairs made since they acquired the property. The disclosures must include a detailed description of all work performed, the names of each contractor involved, and copies of all relevant permits.
If any permits are unavailable, sellers must provide guidance on how buyers can obtain these documents from third-party sources.
For homebuyers, the benefits of AB-968 are substantial. Buyers will now have a clearer understanding of the property’s history and the quality of work performed. This transparency helps buyers make informed decisions, reducing the risk of unexpected issues arising post-purchase. Comprehensive disclosure of all repairs and renovations means that buyers are less likely to encounter undisclosed problems, such as structural issues or unpermitted work, which can be costly to address. With mandatory disclosures, the real estate market in California is expected to become more trustworthy. Buyers can have greater confidence that the properties they are investing in have been thoroughly vetted and legally compliant.
For those in the business of flipping houses, AB-968 introduces new challenges. Flippers must now meticulously track and document every change made to a property. This includes securing and organizing all relevant permits and ensuring that every repair, no matter how minor, is properly recorded. The additional paperwork and procedural requirements could slow down the flipping process, potentially impacting the profitability and speed of these transactions. Non-compliance with AB-968 can result in severe legal consequences, including lawsuits, rescission of sales, or financial penalties. Therefore, flippers must be diligent in adhering to these new requirements.
AB-968 marks a significant shift in California's real estate market, promising enhanced protection and transparency for homebuyers. For house flippers, the law necessitates a more meticulous and documented approach to renovations and repairs. While this may introduce additional complexities, the overall impact is a positive step towards fostering a fairer and more trustworthy market.
As AB-968 comes into effect, homebuyers in California can look forward to greater peace of mind when purchasing flipped properties, knowing that the law is on their side, ensuring full disclosure and transparency.
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Yvon Lux is the editor of her Apple News channel covering lifestyle news and current events. Her “blogazine” celebrates sisterhood and empowers women by focusing on women’s health, travel, lifestyle, and entrepreneurial news while also sharing the most coveted beauty news and style stories.
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